An example of an activity that creates a negative consumption externality is
A)logging, which pollutes rivers.
B)locating beehives next to an orange orchard.
C)smoking, which harms the health of a bystander.
D)a flu vaccination.
E)none of the above.

Question

Quizplus · Accepted Answer

Smoking creates a negative consumption externality because it harms the health of people who are not smokers and are exposed to secondhand smoke. The other options either do not involve a negative externality or have a positive externality (e.g. the flu vaccination, which can prevent the spread of disease to others).

An Example of an Activity That Creates a Negative Consumption